Fairtrade offers renewed concerns over cocoa chain sustainability ahead of World Confectionery Conference

Having played its part in our debut online World Confectionery Conference, Fairtrade International returns again for our debut physical event. Editor Neill Barston speaks exclusively to Jon Walker, a senior cocoa advisor for the global movement, on some of the core issues at stake including raising living standards for farmers.

As he returns once again to our conference, Jon Walker asserts that despite his belief in the ongoing mission of Fairtrade, the cost of living crisis around the world holds major challenges for those farming in the West African cocoa market. See our exclusive video with Jon here.

Just twelve months on from his online appearance as part of our initial event, he previously described the downwardly spiralling price of beans for the trade as ‘a disaster’ for those communities.

Now, with additional strains upon the system in the wake of the Covid-19 pandemic, broader market instability has posed renewed cause for concern for farmers serving the confectionery trade. Put simply, without agricultural producers being given urgent long-term support through enhanced prices and wider community support schemes, then the future viability of the sector remains in doubt. (You can see Jon and a number of other presentations representing the complete confectionery, snacks and bakery value chain at our World Confectionery Conference in Brussels on 9 September, with registration available via our dedicated website.)

Jon said: “Since last year the situation has shifted a little, but prices for cocoa are still 18 per cent below those paid in 2016. “But now, we are in the grip of a global inflation crisis, that is going to be hitting cocoa farmers there, which really is concerning. The rate of inflation in Ghana is around 27 per cent and in Ivory Coast its 5.5 per cent (lower because it’s tied to the Euro currency, which may be rising higher), so we have cost of living increases, fertilisers doubling in price within the past year. So, the cost of production is rising – which could manifest itself in very bad circumstances for them.”

As he added, core concerns could include the fact that with rising costs comes the potential for communities in West African facing food insecurity, resulting in higher rates of malnutrition. Furthermore, he noted that independent research from the International Cocoa Initiative, have indicated shocks to overall household incomes can impact on child labour.

Notably, as Confectionery Production has previously reported, sector analysis has found that with the majority of the cocoa industry in West Africa still essentially consisting of smallholder farmers, a general level of poverty (with many agricultural workers earning little more than $1 a day), they have subsequently been unable to hire adult labourers, meaning children – including younger age groups, are relied upon for manual labour tasks including blade work with harvesting, and pesticide control. As such, wider research has shown a total of 1.5 million children remain at risk from being called upon to engage in such agricultural activities – which should not be undertaken by minors.

In terms of how Fairtrade can assist, he explained that presently, its own additional premiums were having a positive impact. He added: “At a basic level, a tonne of cocoa from Ivory Coast is sold on Fairtrade terms, then that farmer receives an extra 15 per cent on the Farmgate price, compared to conventional prices, which does offer some immediate help. “There is also a Fairtrade premium of $240 a tonne, that goes to the co-op, and it decides how best to use that – and we have seen in the past that they will step in and assist with the costs of fertilisers, income diversification, and in the pandemic, even helped with food relief,” noted the cocoa advisor, who explained it is also engaged with farmers to increase the rate of cocoa actually being traded (which presently stands at around 40 per cent of volume from those farmers who are certified under its programmes), which he believed would have another significant impact on West African communities’ living standards.

The cocoa advisor also stated that while some genuine progress has been made, ‘we need to move more quickly towards achieving living income, but this cost of living crisis could well pull that back,’ he explained, noting that collective action was required to urgently tackle the present economic climate in the region

Significantly, he expressed hope that the situation could be stabilised with in working with some of its industry partners including brands such as Ben & Jerry’s, Tony’s Chocolonely (which will also be speaking at this year’s World Confectionery Conference), Mars as well as retailers such as Lidl, whom the cocoa advisor added had gone beyond standard Fairtrade commitments in offering direct assistance to farmers with crop diversification schemes, access to finance and agricultural efficiency programmes, which would all generate positive momentum. Walker added: “These initiatives are all helping, but what we really need now is change on a systemic level, and one of the rays of hope that are out there, is that this discussion is becoming more normalised within the industry.”

Another core aspect of the situation is that of regulations relating to the cocoa sector. He acknowledged that the two core set of measures being brought forward – centred on sustainability frameworks for human rights and environmental due diligence could also have a significant positive impact for farming supply chains, as well as for tackling deforestation.

“With these measures, there is a shift, but we need improvements to this legislation before it goes into law, but change is happening. These things could be
gamechangers,” noting that important additional controls required, including taking an inclusive approach to the entire supply chain, as opposed to limited aspects of it. Significantly, he believed that the cost of delivering these legislative improvements should not be placed upon farming communities.

Furthermore, he added in relation to payment of agricultural workers, he felt Fairtrade was ‘in alignment’ with suggestions from Michel Arrion, director of the
International Cocoa Organisation, that payment levels need to be increased substantially in order for communities to thrive in their vital roles within the industry.

Collaboration with Earthworm

Significantly, the Fairtrade movement has collaborated with non-profit organisation Earthworm Foundation for a further initiative that is hope to have groundbreaking prospects.

The initiative will use Starling, a satellite-based tool developed by Earthworm Foundation and Airbus, the pilot project aims to capture critical deforestation data within Fairtrade cooperatives and their smallholder cocoa farmers in Ghana and Ivory Coast to support these communities in better management of forests.

The partnership believed the European Commission’s push to ban imports of cocoa, coffee and other commodities when production is associated with deforestation, will strengthen cooperatives and their smallholder members’ access to risk management data, would help better enabling them to maintain access to their core markets in Europe and beyond.

“We are thrilled to announce this landmark partnership that will explore how powerful data sets can be leveraged by cooperatives and their members for their own risk analysis processes and in alignment with expected government regulation against deforestation not just in the European Union but also in the United Kingdom and United States,” added Jon, of its latest major scheme that it hopes will drive impact.

– register for our World Confectionery Conference on 9 September, via our event website, www.confectioneryconference.com

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